Freddie preferred shares have lost 83 percent the past two days, while Fannie's have declined 80 percent, the biggest losers in the Merrill index. The two companies account for about $24 billion of the $190 billion par amount in the index. Forty of the top 50 issuers have declined in the last two days.
The declines are particularly stinging for Fannie and Freddie investors because the companies have sold $20.4 billion of the preferred securities since November.
Those banks using Fannie Mae and Freddie Mac stocks to calculate their cash reserves may find themselves in insolvency very soon!